Do NOT use these commentaries to trade futures contracts. I don’t intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

The GOLD PRICE lost $13.60 (1.2%) to $1,124.60 on Comex while SILVER plunged 56.9 cents (3.9%) to $14.041.

What I like about y’all is that y’all keep your heads in a crisis. While everybody else is moaning and groaning about silver and gold dropping, y’all spotted that GOLD/SILVER RATIO at 80:1 and called me up to swap gold for silver.

More than that, as silver falls the premium on US 90% rises so those swaps from US 90% silver coin to 100 oz silver bars are now approaching a 20% gain in ounces.

Be advised the wait even on 100 oz silver bars is two to four weeks. However, over time premium always disappears, so if you don’t capture it when you can, you lose it. Call us at (931) 766-6066 to execute a swap.

I have to attend my 50th high school class reunion the next two days in Memphis, so I won’t be here tomorrow or Friday, but I’m going out on a limb here.

The GOLD PRICE today fell almost to its 20 DMA ($1,114.29) and an internal support line. With my saw in hand, I’m crawling out on that limb: I believe it is within two days of turning up again. Silver will follow, and the goofs who have been shorting silver and gold will be looking at their heads on a platter in a few days.

If I’m right, this is a spectacular buying opportunity for silver and gold. If I’m wrong, well, it could be worse: you could buy stocks.

One axiom y’all have to learn is this: the Establishment has only two weapons against financial panic, blarney and liquidity. Liquidity means flushing the market with money (think TARP or QE4). Blarney is propaganda, or Blowing Smoke. They trot out the regional Fed Presidents (like NY Fed prezzy Wm. Dudley today) or the Treasury Secretary or even Warren Buffet and Harvard econ professors if things get really bad. These folks sing the siren song to sooth the public’s soul. Blowing Smoke.

And, yes, these two weapons really do compose their entire arsenal, Mushrooms. That’s how thin they are, and how huge and ridiculous their con game really is.

Object of Dudley’s comments was likely the US dollar, which rose 59 basis points today to 95.13. Dollar’s tanking earlier this week makes it appear that the entire dollar rise from last summer was fuelled by nothing more than speculators’ expectations the Fed must raise rates. When the Chinese devalued the yuan and US stocks tanked, however, there was no way the Fed would raise rates. Hence Dudley’s rationalization. He’s saying to the public, “It’s all right, these are not the droids you are looking for.” His words also build the impression the Fed is watching and on top of things. Sort of like saying your six year old is watching you work on the car and will do the ring job for you.

Just remember: blarney and liquidity. It helps make sense out of all these moves and put them into perspective.

Stocks rallied in a predictable, showy, but meaningless rally. Dow rose 619.07 (3.9%) to 16,285.51. S&P500 rose 72.9 (3.9%) to 1,940.51. Both are buried deep beneath their 200 DMAs. Broken, can’t be fixed. DO NOT LET THE BLARNEY SUCK YOU IN.

Do NOT use these commentaries to trade futures contracts. I don’t intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

Here’s an odd thing about the GOLD PRICE. Through all this heat and drops yesterday and today, it still hasn’t broken its uptrend line. Not saying that won’t happen tomorrow, but the uptrend line and the 50 DMA did run together today, and if the GOLD PRICE were just mildly correcting, that 50 DMA would be a usual place to stop.

Here’s another odd thing: SILVER today lost 15.2 cents (1.02%) on Comex to close at $14.61. The Price of gold lost $15.20 (1.3%) ending at $1,138.20. Both lost 15.2 somethings.

Gold/Silver Ratio

Silver’s losses don’t have my ears pricked up as much as the GOLD/SILVER RATIO rise has. It vexes my mind to see that sudden rise (although the double gaps make it appear completed) after the Ratio has walked through the uptrend line from the epochal April 2011 low at 32. The Ratio backed off today, but not enough to prove a reversal by any means. Y’all look. Maybe y’all can figure it out.

What worries me here is the ghost of 2008, when the Ratio ran crazy up to 85:1. I am still trying to study out whether this stock market crash will send folks fleeing into dollars or gold. So far, it ain’t dollars, but this one puzzle piece, the Ratio, won’t fit yet no matter how I turn it.

I listen to the media and hear “experts” solemnly intoning that nothing is basically amiss in the global economy and that the US stock market will come back and I wonder: do they know they’re lying, or is it pure-dee old ignorance and want of experience? I reckon when a man sells cotton candy, he ain’t about to warn you of dental consequences. The word “wicked” comes to mind.

The Shanghai stock index lost 8.5% yesterday and another 7.63% today. Chinese central bank slashed its main interest rates 50 basis points (1/2 percent), its fifth rate cut in 9 months. Funny thing about Keynesians and government-must- control-the-economy people. Eternal optimists, they are never downcast when their illogical policies don’t work. Undeterred, they always say that the policy didn’t fail, we just didn’t do enough of it. Dropping interest rates has been so successful in China that the Shanghai index has lost 2,201 points from its June high, or 42.6% Ditto a raft of other government measures to stop the Shanghai avalanche. Maybe they just haven’t done enough of it yet.

Stocks had an amazing day in the US. The commentators were just a-chortlin’ and burblin’ this morning when the Dow reached an early high at 16,313, up 441 points (2.8%). Whoops — somebody greased the pole, and the Dow slid and slid and slid till it finally came to rest at 15,666.44, down 204.9 (1.29%). Looked at from another direction, it fell from 16,313 and so lost 646.20 or 4% for the day. S&P500 ended 25.59 lower (-1.35%).

I hate sounding like Chatty Cathy saying the same thing over and over, but folks, this has at least another 4 weeks and maybe longer to run. Even now the Dow is working on wiping out two years’ gains. For the year the Dow has lost 12.1%, the S&P500 9.3%. From the May highs the Dow has tumbled 14.4%, the S&P500 12.4%.

A 20% loss from the highs would take the Dow to 14,650, the S&P500 to 1,705. Right, it sounds crazy now, just like $1,070.00 gold sounded crazy in August 2011, but not in August 2015. Hang around: crazy gets saner over time.

I’m only going to say this one more time, to make sure y’all have heard it and listened, so clean out them ears and pay attention: the Dow in Gold and Dow in Silver have given unequivocal, unmistakable, unshakable signals that the trend of stocks against silver and gold has turned. For the next several years, silver and gold will GAIN VALUE against stocks. Write this on the backs of your eyelids: before this bear market in stocks ends the Dow will trade for one to two ounces of gold, or for 16-32 ounces of silver.

Today the Dow in Gold ended at G$284.03 (13.74 troy ounces), down 16.7% from its July high. Dow in Silver closed at S$1,381.69 silver dollars (1,068.65 troy ounces), 13.6% lower than the high. Everybody wants to make life complicated and pretend to be an expert when only a very few things are important, and only a few bulbs give light. But Mercy! Don’t pay no ‘tenshun to me — I’m jes’ a nat’ral born durn fool from Tennessee, and I been wrong for years.

US dollar index gained 75 basis points today and ended at 94.11. This +0.81% move was enough to bring it back up to the 200 DMA (94.66) for a touch, but not enough to close above it. Looks plumb broke down to me, but needs to close below the May low (93.15) to plumb prove it. I reckon it will.

Now y’all know that all markets are manipulated nowadays, and none more than currencies, right? I haven’t said anything about the Nice Government Men because I hate to keep beating that obviously defunct equine, but y’all know they were up bright and early today, jus’ a-buying them S&P500 index futures with all their little hearts (and they are little, practically non-existent). But while governments and central banks manipulate markets, they do not control them. Hence every now and then markets get out of hand, as in China and the US. And if the dollar keeps accelerating its course to the earth’s core, sooner or later the Fed will step in to slow the fall. Likewise, when the Fed gets scared enough — and it don’t take much to scare ’em — they will commence Quantitative Easing 4. Y’all hide and watch.

Do NOT use these commentaries to trade futures contracts. I don’t intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

Dow opened down and quickly fell 1,089.42 points. That’s not a typo, 1,089.42 Only barely did it manage to close above the October 2014 low (15,855), and that only after climbing 588.4 points off the low.

Broken beyond repair.

Note that crash cycles last six to eight weeks. That popping sound y’all hear are just the corks coming out of the jugs — party is just starting.

Dow fell 588.4 or 3.57% to 15,871.35. S&P500 lost 77.68 or 3.9$% to 1,893.21. Investors had all weekend to stew over Friday’s losses and you can bet the sell orders were stacked higher than they hung Haman this morning. Market opened and there just wasn’t room for everybody to get through the door at the same time.

Dow in gold fell 3.1% or G$9.10 gold dollars to G$284.23 (13.75 oz), now in shooting distance of the uptrend from the 2011 low. Go look, y’all will seldom see a chart like this,

Dow in silver did nothing because of silver’s loss today, but is still broken and destined to fall much further. Ended at S$1,390.27 (1,075.29 troy ounces).

More shocking even that stocks’ performance today was the US dollar index Early in the day it simply tanked, falling 248 basis points (2.61%) to a low at 92.62. Ended down only 145 basis points (1.53%) at 93.56. Chart is here:

Dollar index SMASHED its 200 day moving average and only barely closed above the June low (93.30), ending at 93.56.

If this happens in the green tree, what will happen in the dry? This took place IN SPITE OF millions flowing into US Treasuries, witnessed by the 2.78% fall in yields.

Euro rose 1.89% to $1.1604. Who in his right mind would look upon the euro as a “safe haven”? Nuts. Gapped up and over the 200 DMA. Headed higher as surely as the US dollar is headed lower.

Most shocking is the yen, up 3.05%. Gapped clean over its 200 DMA and closed at 84.42. Pushed it up to way overbought on RSI.

This dollar fall presents the today’s biggest question. Normally a stock market crash does not take down a national currency. If anything, just the opposite as investors rush to cash for safety. This is a right bad sign.

That sent the ratio up to 78.133, following the pattern of the ratio in 2008. Most obvious explanation is that Gold is catching the flight-to-safety money but silver is not. I’m still trying to fit this together with the dollar’s plunge. Look at the chart here:

Plainly I misjudged gold’s strength on Friday, and its ability to punch through the resistance from $1,155 to $1,190. Will gold be sucked down with stocks? That’s not what the Dow in gold says, but now we have to wonder about silver.

Shades of 2008! Premium on US 90% silver climbed another 45 cents an ounce today, about offsetting the drop in price. During 2008 the premium on all physical silver rose well above 50%. Paper price dropped, but physical refused.

More choices: maybe gold is merely correcting the vertical rally that brought it to the top channel line. About all that’s sure is more turmoil. No matter whether silver and gold are pulled down in the maelstrom of stocks crashing, the aftermath will see them soar. Already you are better off to have swapped stocks for either gold OR silver than to have held on to stocks.

Silver’s drop today shouldn’t surprise us. It ain’t gold, after all, but gold’s little brother. Still, both today and Friday behaved much the same, with a sudden drop and just as sudden recovery. Toward day’s end, however, silver looked tired and began inching down.

It’s a panic. If you’ve ever lived through a house or forest fire you know what that means, the fear that grips and the confusion what to do next.

All in all, no matter how this panic rolls out, I’d rather be holding silver or gold in my hands than dollars. Call me paranoid. ‘Twon’t hurt my feelings a-tall. I ain’t no more’n a nat’ral born durn fool from Tennessee anyway — but I didn’t own no stocks, remember.

Do NOT use these commentaries to trade futures contracts. I don’t intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

Clearly the GOLD PRICE is trying to take over the lead silver has held all year. That’s logical when financial panic is driving buying. Look at the gold chart on the right: See that sprint the last three days, where it makes a leap, then another leap, then another? That’s a third leg up. First leg took it up $40, third will take it $80 or more. Runaway. Aiming for the 200 dma at $1,187. Oh, it will back off then, but after that fourth wave down comes the fifth up, which in metals often exceeds the third. This rally may not rest until it has touched $1,250. If it gets really crazy, maybe $1,300+. Yeah, I know I sound crazy but remember, I don’t claim to be any thing but a nat’ral born durn fool from Tennessee. Good thing about that is I don’t never disappoint myself nor nobody else.

Resistance at $15.60 and the downtrend line from the April 2013 high are presently blocking silver. Y’all had better stand OUT of the way when silver busts through. This rally should carry to the May high at $17.775.

Better buy some silver and gold. Yes, there remains the chance that whatever financial panic the stock Niagara precipitates will suck down silver and gold into the whirlpool, but so far it’s sucking stocks and the dollar and floating silver and gold prices higher and higher. I’m jes’ a bit of flotsam on the wave, floating for all I’m worth.

This week saw stock markets break not in the US alone but around the world — just as the week of 24 July saw silver and gold prices bottom. The US dollar fainted, passed out, and fell down a manhole.

Considering the beating silver took during the week, it looks pretty good. The GOLD PRICE punched through two or three resistance levels. This metals rally is the genuine article.

Stocks are crumbling and running all over the world, and the water ain’t even hot yet. What will they do when it gets really bad? Why, I’ll tell y’all what the Fed will do: QE4. They’ll puke out new money like a 16 year old boy projectile vomiting a six pack of Shiner Bock he unadvisedly guzzled in 23 minutes.

Shanghai stock index lost 12.2% these week alone, and has fallen 32.3% from its June high. Here’s how US indices look FOR THE YEAR: Nasdaq 100, – 2%; Nasdaq Comp – 0.6%; Russell 2000 – 4%; Wilshire 5000, -4.2%; NY Stock Exchange, -9.4%; Dow Industrials – 7.6%; S&P500 -4.3%. From the May all time highs, the Dow Industrials index has lost 10.1% and the S&P500 7.5%

Dow Jones

S&P 500

But today had ’em puking in their wastebaskets and phoning to housekeeping for more wastebaskets. Dow stepped off a cliff: down 530.94 or 3.12% to 16,459.75. S&P500 held hands with the Dow on the way down. It lost 64.84 or 3.19% to 1,970.89. Busted through that 2000 mark like it was a hollow core door. Here are 8 month charts of the Dow and S&P500.

These here stocks are broken and can’t be fixed. Expect the Nice Government Men to step in when the bleeding slows from arterial to seeping to try to pump stocks up. ‘Twon’t work. They are broken.

Party has just now begun. Fiddle is jes’ tunin’ up and the corks are jes’ now poppin’ out’n the jugs. Will-they, nill-they, everybody’ll be dancin’ to this here tune.

Did I ever tell y’all that markets fall two or three times as fast as they rise? Yes, they do.

Dow in Gold

Dow in Gold and Dow in Silver are SCREAMING a market turn. Here’s the DiG, Y’all put that in your scrap book, you won’t see many fall like that. Sliced through the 200 DMA (G$310.70 gold dollars/15.03 oz) and never stopped till it hit G$293.33 (14.19 oz). Since the July high at the throwover (G$341.08/16.5 oz) the Dow in Gold has lost 14%. Has also fallen through the uptrend line that has been catching it since August 2013 (I make that 2 yares).

Dow in Silver

Dow in silver ended today at S$1,389.12 silver dollars (1,074.4 troy ounces), way below its 200 DMA (S$1,426.87/1103.6 oz) and below its uptrend line from August 2013.

And both of ’em have just begun to fall. I repeat what I have long urged: Sell stocks and put the proceeds into silver and gold. There’s still time.

USD Index

My dear Susan thought I had suffered a heart attack when I opened the US dollar index chart and shouted, “WHOA!” That nasty thang stabbed through 95.50 support like it warn’t there then kept on falling just to get as close to the 200 DMA (94.60) as it could. It also closed under the apex of that triangle it broke out of in July. It just keeps nailing nails into its own coffin. Lost 94 basis points today to end at 95.00, down 0.97%.

Euro

Euro meanwhile rose 1.32% to $1.1388, pretending it’s a debutante just cause the dollar passed out on the floor. It has broken above its downtrend line and today above its 200 DMA. Tain’t no debutante. Euro remains a scabby, scrofulous fiat currency and whoever grabs aholt of it will pull away a hand covered with slime. Technically the last three days saw the euro post two breakaway gaps, very strong.

The yen also broke away with a gap today and gained 1.06% to 81.92.

What in the world are the Nice Government Men thinking about? Their whole fiat world is a shakin’ and quakin’! Law, y’all, don’t look for no tears here in Tennessee, cause y’all won’t find ne’er a one.

Do NOT use these commentaries to trade futures contracts. I don’t intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.